Former EU chief calls U.S. tariffs on Brazil ‘unjust’ – Valor International
José Manuel Durão Barroso, former European Commission President and ex-Prime Minister of Portugal, criticized the recent U.S. tariffs on Brazilian products as confusing and unjust. While he admits he may have a bias due to his connections to Brazil—being a friend of the country and the son of a Brazilian-born father—Durão Barroso contended that the tariffs seem politically motivated. He finds it especially baffling since the U.S. maintains a trade surplus with Brazil. “The risks of protectionism outweigh those of liberalism, in the positive sense. Any such measure is usually harmful,” he said.
- New study says Americans bear most of Trump’s tariff costs
- Brazil’s foreign minister says U.S. willing to continue tariff talks
- New U.S. tariff may hit up to 45% of Brazil exports
Durão Barroso also expressed approval of the completion of the Mercosur-European Union trade agreement, a process he had participated in from the beginning—initially as part of the Portuguese government and later during his two terms as European Commission president from 2004 to 2014. He noted that the agreement was only finalized after over 25 years of negotiations, primarily due to Donald Trump’s return to office. Barroso mentioned this re-election, along with two other developments, to support his view that the world has become “more polarized, fragmented, volatile, unpredictable and dangerous.”
The other two events are Russia’s invasion of Ukraine and the Hamas attacks on Israel on October 7, 2023. Even if a ceasefire is reached in the Middle East, he predicts that fossil fuel prices and related costs will remain high for some time. “Uncertainty in the Strait of Hormuz will continue for the foreseeable future,” said Durão Barroso, who was in Brazil for a conference organized by Global Citizen, a platform dedicated to fighting extreme poverty and protecting the environment. In this context, he considers the possibility of higher interest rates but does not see a reason for panic.
The main excerpts from the interview follow:
Valor: How would you describe the global landscape today?
José Manuel Durão Barroso: The world today is more polarized, fragmented, volatile, unpredictable, and dangerous. In my view, there are three main reasons for that: Russia’s invasion of Ukraine, Hamas’s terrorist attacks against Israel on October 7, 2023, and the re-election of President Donald Trump, which added volatility and unpredictability to an already difficult situation. All of this is taking place against a backdrop of broader structural issues, including the global competition between the United States and China, the consequences of the Covid-19 pandemic, climate change, and the energy crisis. Trump’s re-election is not a crisis in itself—it was democratic—but he is a major disruptor. He changes the grammar of politics, the set of principles and general rules, established protocols, and the conventions of diplomatic behavior.
Valor: What does that mean?
Durão Barroso: We are living in a situation of complete unpredictability. The world has experienced worse moments, such as the First and Second World Wars, but there is now a generalized sense of anxiety. There is a sense that we are leaving a certain order behind, but we do not yet know what will replace it. On top of that, we are at the beginning of a major scientific and technological revolution—not only because of artificial intelligence—and facing structural challenges such as climate change, the energy crisis, global competition between the United States and China, and even the psychological consequences of the pandemic. The pace of change is accelerating dramatically.
Valor: What impact do you see today from the war in the Middle East?
Durão Barroso: Without taking sides, the issue of the attacks on Iran originated with Hamas’s attacks on Israel. Israel’s strategic objective—certainly at least that of Benjamin Netanyahu—has always been to destroy Iran’s capabilities. Iran, for its part, continues to declare that its goal is to eliminate Israel from the face of the Earth. Netanyahu succeeded in convincing the American president [to attack Iran], something others had failed to do. The bombing campaign was intense, but as we have seen, it did not bring down the regime. In fact, Iran discovered that it has far greater influence than it thought through its control of the Strait of Hormuz. Geopolitics still matters. Despite living in the age of artificial intelligence, physical geography—whether or not one controls a few kilometers of land or a strategic strait—still has major consequences. The Americans, who are undoubtedly the world’s leading power, inflicted significant damage on Iran, but so far, they have not prevailed in the situation.
Valor: How does that dynamic work?
Durão Barroso: At a much lower cost, Iran is able to achieve its objective, which is preserving the regime. In some respects, it is among the worst regimes in the world because it not only suppresses political freedom but also denies civil freedoms to more than half of its population—women. Perhaps only Afghanistan compares. My view is that even if a ceasefire is reached, there will not be a stable and consolidated situation. Markets should be prepared for higher fossil-fuel costs for some time. Shipping companies operating in the region face higher costs, insurance has become more expensive, and even if free navigation is restored, costs will remain elevated. In the long term, the problem can only be overcome through alternatives such as pipelines. Uncertainty in the Strait of Hormuz will remain for the foreseeable future.
Valor: How do those effects play out?
Durão Barroso: The effects are asymmetric. They impose an additional burden mainly on countries that import fossil fuels, such as Europe and China, even though China currently has substantial reserves. For some countries, such as energy exporters, the situation may even be advantageous. But even in the United States, which is an energy exporter thanks to shale gas, oil prices remain a domestic concern because of gasoline prices. That is one reason the war is not particularly popular and why Trump has an incentive to bring it to an end, although that is not easy. The Iranians have decades of negotiating experience and tend to procrastinate—they are masters at it.
Valor: Does that lead to slower economic growth?
Durão Barroso: In general, it is a concern because the conflict is already affecting inflation, which signals the possibility of higher interest rates. I am not a market specialist, but I would not be surprised to see rates rise, including at the European Central Bank.
Valor: So far, however, the economy continues to grow…
Durão Barroso: The global economy and even international trade have shown a degree of resilience despite all these crises. It is as if decision-makers and markets have internalized these risks. International trade continues to expand. It is like a great river: when it encounters an obstacle, it finds another path. That is still where we are. We need to see whether a more catastrophic event emerges and creates panic in the markets, but for now, the risks appear to be under control.
Valor: How do you view the U.S. tariffs on Brazilian products?
Durão Barroso: As an observer, I may be somewhat biased because I am a great friend of Brazil. My father was born here, and I have family here. I may not be entirely impartial, but what is happening to Brazil seems unfair to me. Brazil actually runs a trade deficit with the United States. As uncomfortable as it may be, one can at least understand the American administration wanting to offset trade deficits with Europe or China, for example. But it is very difficult to understand why it would do the same with Brazil. It seems there are very political reasons behind it. I support open economies and free trade. The risks of protectionism are far greater than the risks of liberalism, in the positive sense of the term. Measures of this kind are normally negative. Without prejudice to legitimate actions against abusive trade practices, trade and investment should be as open as possible. That openness is what allowed the world economy to grow so much in recent decades and helped lift millions of people out of poverty and hunger.
Valor: What path should Brazil take?
Durão Barroso: Honestly, I do not know enough about Brazil’s current situation to offer advice. What I do know is that Brazil is one of the world’s largest economies, its potential remains immense, and it certainly has strong arguments to negotiate from a position of relative strength. Brazil has been seeking to negotiate with the United States using the best arguments and the tools at its disposal. What I can say is that Brazil has an outstanding foreign ministry—one of the best in the world. In Brazil’s case, I would always seek diversification, which is exactly what the country is doing today. Do not depend on only one or two major powers as partners.
Valor: As in the Mercosur-European Union agreement?
Durão Barroso: I was pleased because we finally managed to conclude the agreement between Mercosur and the European Union. I was involved from the very beginning of that process. To a large extent, it was a reaction to American policies. It was only because of Trump that Europeans and Mercosur countries decided to conclude an agreement that had been under negotiation for more than 25 years. And it was not only Mercosur. The European Union also concluded an agreement with India, and another is being negotiated with Australia. The European Union matters because it is a major trading partner and a predictable one. You may agree or disagree with some of its policies, but it respects multilateral rules.
Valor: Nevertheless, there was still resistance…
Durão Barroso: Some of the resistance that previously existed in Europe has diminished. There were still votes against the agreement, including from France, which I regret. But the decision was approved by a qualified majority, and that was what was possible. The important thing is to have free and fair trade, and I believe the Mercosur-European Union agreement achieves that.
Valor: What do the two blocs stand to gain?
Durão Barroso: Everything to gain and nothing to lose. I have very deep convictions that go beyond economics and extend to geopolitics. We must avoid a new polarization similar to the Cold War, between West and East, between the United States and the Soviet Union. Today, there is global competition between the United States and China, which I believe will continue and intensify despite statements following the most recent meeting between President Xi Jinping and President Trump. There is also an attempt by some to create a new polarization between the Global South and the Global North.
Valor: In what way?
Durão Barroso: There is what I call the mobilization of resentment. The Global South has every reason and justification to seek greater influence, not least as a matter of fairness. But I do not believe that should be based on a policy of post-colonial resentment. Resentment is an emotion, and emotions rarely lead to good outcomes. There must be a rational foundation. The world needs a certain degree of cooperation—between the Global North and the Global South, among the G7, the G20, and the BRICS countries. Antagonistic discourse makes no sense. What is needed is a principle of sincere cooperation. Brazil is a key country in that regard.
Valor: How so?
Durão Barroso: Brazil can play an extraordinary role because it understands both worlds. It is part of the Global South, an emerging economy that is not at the level of the United States or the most advanced European economies, yet it shares with the so-called Global North some of the central features of its civilization: the rule of law, pluralist democracy, freedom of the press, and equality between men and women. These are things we sometimes take for granted, but they are not. The rise of the Global South should happen, but not on the basis of resentment, envy, or revenge. As a friend of Brazil, I hope the country will do that. At the same time, the more advanced countries need to understand that they do not own the world. Empires, as Portugal knows very well, come and go—they do not last forever. Arrogance is always a form of stupidity. That is why the world’s most powerful countries should not only have humility but also the intelligence to give more space to the countries of the Global South.
This article was translated from Valor Econômico using an artificial intelligence tool under the supervision of the Valor International editorial team to ensure accuracy, clarity, and adherence to our editorial standards. Read our Editorial Principles.
Higher inflation, elevated borrowing costs, and Middle East tensions weighed on demand despite growth year to date
Vice president says Brazil will seek reinstatement on the EU list of approved exporters of animal products as technical negotiations intensify
Dairy producers are challenging government’s rationale
PEC is key opposition agenda item as lawmakers seek to capitalize on public security debate ahead of elections
Manifesto drafted at party’s evangelical gathering seeks to strengthen ties with religious voters
Commercial aviation chief says strong demand remains in the narrow-body aircraft segment, where Embraer holds a 76% market share
Kevin Murakami says Trump administration prioritizes investment attraction; he sees ‘perfect’ conditions for Brazilian companies
Elections chief’s provisional ruling faces resistance over lack of technical report and concerns about damage to polling credibility
Company faces urgent challenges and must persuade creditors in Brazil and Mexico
Heads of the economic analysis and communications offices were also removed
